Alphabet tempers fears that it’s falling behind in AI

Alphabet went into its earnings report on Thursday facing concerns about the growth of its core Google ads business and the company’s ability to generate profits from its hefty investments in artificial intelligence.

For the time being at least, the company put Wall Street’s fears to rest.

Alphabet topped analysts’ estimates, reporting revenue growth of 15% for the quarter, the fastest rate of expansion since early 2022. Ad sales at YouTube jumped 20%, also beating expectations.

Questions have been swirling about the future of Google’s online ads, because the biggest revenue driver remains search, which is under pressure as new generative AI services like OpenAI’s ChatGPT offer consumers new ways to access information.